Modern day insurtechs are grinding their way up astonishingly fast and look to soon re-evaluate their goals with the further development of technology and the accessibility provided in the Tier 2 and Tier 3 cities.
With the advent of the pandemic, the insurance sector is rapidly becoming imperative as people realise how insurance services can aid in emergency situations. The need for being prepped for a contingency is paramount in today’s time. Insurance providers are wasting no time in investing in their future and are leveraging technology to grow and serve the citizens across the country. In fact, there has been a three-fold increase in health insurance penetration in Tier 2 and 3 cities.
Insurtech is when technology is implemented to extract revenue and efficiency from the current insurance industry model. Usually not viewed as technological pioneers, insurance organisations are proactively investing in newcomers in the technological sector to evolve into these insurtechs to establish an analytics foundation and develop reliable data. Additionally, predictive modelling, internet of things, artificial intelligence, open API, connected devices and open insurance models are the factors that have led to a growing customer base for such insurtech companies.
As policyholders transformed their expectations after the outbreak of Covid-19, insurers have made health plans affordable through a monthly subscription model, which is very easy on the pocket. With a low ticket size, the entry barrier is reduced, and there is adoption from young customers across Tier 2 and Tier 3 cities. Millennials have accounted for the remarkable growth of the sector by investing in themselves and their families, especially the people in the age group of 25 to 45 years.
In order to educate the customers about the fee structures, packages, coverage and conditions included in a policy, insurtech firms are spreading awareness through mobile applications, new-age easy-to-access products and services. Furthermore, connected devices, internet of things, artificial intelligence, etc. have brought a massive change in operations, ideation of new products and services. The implementation of AI across the value chain has enabled insurance providers with quick onboarding of partners, faster claim settlement, accelerating the application process and reducing the month-long time to just a few hours, and the automation of the underwriting process by analyzing a customer’s records, reports and related information to evaluate risks and provide quotations instantly.
To shift and grow during this phase, insurance companies need to make suitable choices to move forward and initiate their respective transformation. Speed has become the top priority nowadays, as people want next day deliveries and credit decisions made in a minute. The internet-first insurance platforms have become a preferable choice with their quick service at just a tap as compared to interaction with conventional agents.
In addition to this, funding in these insurtech brands has reached new heights. We are at the crossroads of yet another industrial revolution and the cycle is repeating itself, arguably being the most technological innovation that has been achieved in the past decade compared to the five decades that preceded it.
Even with the top funding and technological advancements, insurtechs need a coherent strategy that involves reassessing capabilities of the company by delivering on their respective value propositions, brainstorming how the products and services fit their patrons’ needs and finally how to create value for their products. The insurance industry always advances with the economy and almost runs parallel with it. Furthermore, evolving with the trends; insurtechs are transforming the models used for collecting premiums and shifting it to a pay-per-use style, emphasising on loss prevention and restorative services.
Modern day insurtechs are grinding their way up astonishingly fast and look to soon re-evaluate their goals with the further development of technology and the accessibility provided in the Tier 2 and Tier 3 cities. Be it social insurances or customised policies, insurtech firms are dominating the market. As people gain more knowledge on insurance and opt for the same, insurtechs are sure to provide solutions to their patrons.